Question

Sylvestor Systems borrows $79,000 cash on May 15, 2016, by signing a 30-day, 6% note. 1....

Sylvestor Systems borrows $79,000 cash on May 15, 2016, by signing a 30-day, 6% note.

1. On what date does this note mature?

  • June 13, 2016

  • June 14, 2016

  • June 15, 2016

  • June 16, 2016

  • June 17, 2016

2. Assume the face value of the note equals $79,000, the principal of the loan.

(a) Prepare the journal entry to record issuance of the note.

(b) First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your journal entry to record payment of the note at maturity. (Use 360 days a year. Do not round intermediate calculations.)

Journal entry worksheet

  • Record the payment of the note at maturity.

Note: Enter debits before credits.
Event General Journal Debit Credit
1
Business   Accounting   
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Homework Answers

Answer #1
Days
May (31-15)= 16
june 14
total 30 Days
1) June 14,2015
2) Date General Journal Debit Credit
15-May Cash 79,000
Notes payable 79,000
b)
principal 79,000
Rate(%) 6%
time 30/360
total interest 395
Event General Journal Debit Credit
Notes payable 79,000
interest expense 395
Cash 79,395
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